Sweden’s financial supervisory authority, Finansinspektionen, has taken a stand against investing in crypto assets, on the grounds that they threaten the climate transition because of the energy-intensive mining behind them – and said firms investing and trading in such assets should not be allowed to claim sustainability credentials.
In a joint article by Erik Thedéen, director general of the Swedish FSA, and Björn Risinger, director general of the Swedish Environmental Protection Agency, published on the FSA’s website, the pair said the most common method for producing crypto assets required enormous amounts of electricity and generated large CO2 emissions.
Crypto asset producers were now keen to use more renewable energy, and were increasing their presence in the Nordic region, they said.
“Sweden needs the renewable energy targeted by crypto-asset producers for the climate transition of our essential services, and increased use by miners threatens our ability to meet the Paris Agreement,” argued Thedéen and Risinger.
“Our conclusion is that policy measures are required to address the harms caused by the proof of work mining method,” they said, adding that it was important that both Sweden and the EU could use the Nordic nation’s renewable energy where it provided the greatest benefit for society as a whole.
The director generals called for three measures to be taken – for the EU to consider banning the energy-intensive mining method proof of work, and secondly for Sweden to stop crypto mining production using energy-intensive methods.
The third demand made by Thedéen and Risinger is: “That companies who trade and invest in crypto assets, that were mined using the proof of work method, cannot be allowed to describe or market themselves or their activities as sustainable”.
They admitted in the article that there was a risk that these measures would lead to crypto producers relocating to other countries, potentially resulting in overall higher emissions of carbon.
“But it is important that Sweden and the EU lead the way and set an example in order to maximise our chances of meeting the Paris Agreement,” both said, adding that other countries and regions should be strongly encouraged to follow suit.